The climbing limo method of forecasting future GDP in the United States projects the nation's economic output in the third quarter of 2024 will be within a few percent points of $29.6 trillion.
The U.S. Bureau of Economic analysis released a pretty extensive set of revisions for its GDP data going back to January 2019, which changed the climbing limo's forecast for what non-inflation adjusted GDP will be in 2024-Q3. The new forecast is nearly one percent higher than the original forecast for the quarter.
The climbing limo's latest projections based on the revised data can be seen in the following chart, which also adds the first projection for how large the non-inflation adjusted economy will be in 2025-Q1.
The climbing limo method is a very simple forecasting technique that projects the level of GDP some three quarters into the future using the nominal GDP figures from five quarters and three quarters before that point in time. As such, its forecast represents the momentum of the U.S. economy recorded between the two data points it uses. Deviations between the actual trajectory of GDP and the forecast tells how the momentum of the U.S. economy has changed, which provides useful information even when the differences between forecast and actual values are large.
References
U.S. Bureau of Economic Analysis. National Income and Product Accounts. Table 1.1.5. Gross Domestic Product. [Online Database]. Accessed 4 October 2024.
Political Calculations. Forecasting GDP Using the Climbing Limo. [Online Tool]. 10 May 2005.
Image Credit: Microsoft Copilot Designer. Prompt: "A simple sketch of a limousine driving uphill toward the right side of a rising zig zag line chart".
Labels: gdp forecast
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